The JSE-listed real estate investment trust (REIT) Accelerate Property Fund has reported a loss of R625 million for the year ended March 2024.
The loss is primarily due to the revaluation of investment property to its fair values and increased expected credit loss allowances during the year resulting from long overdue debtors, according to the company.
Its position has worsened from the previous year, when it recorded a net loss of R594.3 million.
"Global growth forecasts continue to revert downward, more so for emerging markets. Continued load shedding, high cost of energy, rising overall costs coupled with low economic growth, illiquid financial markets, and higher interest rates will continue to put the Fund under pressure," the company stated.
Current liabilities of R3.9 billion and R4.5 billion exceed its current assets by R1.9 billion and R2.5 billion for the group and company, respectively.
"This is mainly due to the structural tenure of the Group’s funding facilities and, as such, the ability of the group and company to meet its obligations to lenders in the short-term will be constrained," it said.
The company pointed to a number of global geopolitical and economic headwinds.
"Global growth forecasts continue to revert downward, more so for emerging markets. Continued load shedding, high cost of energy, rising overall costs coupled with low economic growth, illiquid financial markets, and higher interest rates will continue to put the Fund under pressure," the company reiterated.
Despite these challenges, the group maintains that it remains a going concern, capable of generating sufficient cash flows to meet its obligations for the next 12 months.
The group’s covenant loan-to-value (LTV) ratio was 49.7%, compared to 47.2% in the prior year.
Looking ahead, Accelerate remains committed to reducing its debt exposure by raising R200 million through a fully underwritten rights offer, which was successfully concluded on 11 June 2024, and adding another R100 million to this in the 2025 financial year.
It also plans to dispose of assets to improve liquidity while continuing to renew facilities in the 12-month period ending March 2025.
This includes the renewal of Fourways Mall, the biggest asset in its portfolio. Accelerate has owned 50% of the undivided share in Fourways Mall since 29 November 2019 and accounts for it as a joint operation.
The fund recently appointed Flanagan and Gerard and the Moolman Group to execute a six-month strategy to improve its financial performance and attract more visitors to the mall.
Shares in Accelerate have declines some 15% in the year to date, and 33% over the past 12 months.
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